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Cruise Week

27.07.16

It’s been a particularly bad news summer for Europe as migrant and terror concerns have been exacerbated and disruptions continue. But, retailers seem generally upbeat. The cruise industry is not going to trash pricing anymore,” said one agent, adding they may not need to.

It appears post-summer Caribbean is strong. Yes, there’s Zika, but as one veteran agent summed up, “Millennials are gravitating to Caribbean cruising in big numbers.”

People are numb. “Last year I had some people quitting the Med because of the migrant situation,” said one source. “Some would go to Canada/New England, other places. But this year, Turkey just keeps getting worse; ISIS is not going to sit still.”

It hasn’t been just international headlines but also individual situations impacting travel. The port strike is over in Piraeus - unions objected to foreign ownership buying and privatizing the Greek port - but that was followed by short strikes this past week at Rome and Venice airports involving air traffic controllers and baggage handlers, once again inconveniencing travellers.

You might think the real challenge for bookings would be further out for 2017 Europe business. But early indicators are that bookings are coming in nicely on the ocean side, all things considered. Some say futures are down. But several retailers say that their 2017 Europe groups are filling nicely for next year. “Some people are staying away, some people are making the $100 deposit. Groups seem to be hanging in better than FITs.”

For the most part, the cruise lines haven’t made any changes for 2017 that hadn’t been on the books before summer started. Carnival Corp. did drop Turkey in unison for all of their brands and Celebrity is keeping 1 ship in the Caribbean for summer 2017. But that all seemed logical with building a market since substantial growth is ahead in 2018.

For 2017, the cruise lines are really benefitting by not having a big capacity increase to contend with in Europe. Hence, in the cruise industry, there is no panic whatsoever - just logical decisions. The lines have the various promos out, but they’re the basic promotions. When you look at the ships’ inventory and other typical measurements of forward books, it seems pretty good out there - all things considered.

Given all the news, one might expect lines to make more moves away from 2017 Europe, but little has happened yet. And in this industry, there’s a general belief at the top that there’s more money to be made on a bad day in Europe than a good day in the Caribbean, with the exception of a very few brands.

Lines seem to be calling in groups at normal periods for winter Panama Canal and other areas. If space isn’t booked, it’s pulled just like usual. There’s not that tremendous loosening up that signals business is bad.

One retail source did report that 2017 is going to be another big year for Alaska and a bigger year for Canada/New England and other markets, in part because far more people than usual are uncomfortable about taking a European vacation. “Unfortunately, the world being the way it is, more people are staying home this year.” He added that the latest cruise promos have gotten off to a slower start, but it may be that they launched a bit early or it may be sales fatigue – “nothing to lose sleep over”.

All the problems in the world haven’t stopped people from booking world cruises. Those are continuing to move at a steady pace. That symbolizes how people with money are traveling and shows no signs of stopping.

In our spot checks on business, it’s a curious mix of responses. A lot of agents say they are hitting their numbers. Unfortunately, a lot of the big players aren’t growing, but many smaller agents are coming back to ocean cruising. Alaska is a huge part of that return. Some agents are reporting that they are ahead of last year in total revenue, while some are not hitting their goals. Others say body count is down, even if revenue is okay.

The world may be in a troubled spot, but it’s all quiet on the cruise front. Yes, there has been lots of coverage since May with all the new ships in and the QM2 renovation: “But otherwise, it has been really, really quiet, even by July standards - and that’s good because if it’s not quiet, that means something is happening,” said one source. “Quiet is boring. This summer, boring is good.”

Alex Sharpe, President & CEO of Signature Travel Network, sums it up: “Certainly alternative destinations are coming to the forefront, cruises continue to provide an extra level of comfort for guests, and, in some ways, promotional mechanisms help people overcome their fears. [It’s] not going to be easy, but as Americans become more resilient and agents keep grinding, we always find a way.”

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